Putnam may set up economic development trust fund

Putnam leaders think they may have a way to keep investing in the local economy without drawing from the town’s general fund.

A proposal has been brought forward to create an economic development trust fund.

“It’s a way to reinvest economic development funds into economic development,” said Delpha Very, Putnam’s director of economic and community development.

The fund would allow the town to deposit some or all of the money from the sale of land in the industrial park or elsewhere into the fund for future economic development efforts. Very said the funds could be used to help develop the future technical park or improve access to unsold lots in the industrial park, or even for marketing and other economic development undertakings.

For the fund to be created, the Board of Finance must approve a proposed ordinance and send it to the Board of Selectmen. The Board of Selectmen must then send the ordinance to town meeting.

Selectmen have discussed the ordinance but is waiting for the finance board to make a decision. The finance board has tabled the discussion once and is expected to bring it up at its next meeting.

The finance board has asked for information about how other communities have used similar trust funds. Town Administrator Douglas Cutler said the trust fund is based on one that has been used for years in Killingly.

“We don’t necessarily want to reinvent the wheel,” Cutler said. “We look to the best practices of other communities.”

Cutler also asked the Connecticut Conference of Municipalities if any other communities similar to Putnam have such a trust fund. Based on community size, Cutler said CCM found nothing comparable to what Putnam wants to do.

“We really do have the infrastructure, amenities and needs of communities much larger than we are,” Cutler said.

Cutler said not only are there checks and balances in creating the trust fund, there also would be numerous safeguards before using the money in the fund, and putting money into it.

Cutler said the town charter has a process for selling and purchasing land. As part of that process, the Board of Selectmen would determine how much, if any, money from a sale might be invested in the trust fund.

Very said the ordinance would also outline the process for using any of the money in the trust fund, and it would likely include approval from both the Economic Development Commission and the Board of Finance.